The merger of Gresham Technologies and Alveo, which was announced last week, was born of a desire by each company to scale their capabilities to meet growing international demand from financial institutions at a time of increased focus on data management.
The venture saw Gresham Technologies delist from the public market to create the new company, which will be known as Gresham. The deal has resulted in a company that combines Gresham Technologies’ transaction control and reconciliations, data aggregation, connectivity solutions and regulatory reporting capabilities with Alveo’s enterprise data management for market, reference and ESG data.
Backed by Alveo’s majority investor STG, a technology-focused private equity firm, the combined business has got to work promoting what it calls its enterprise data automation offering.
Data Management Insight spoke to chief executive Ian Manocha, formerly head of Gresham Technologies, and chair Mark Hepsworth, who held the leadership role at Alveo, about the genesis of the merger and their plans for the future.
“We think it’s a big thing, and I hope the industry recognises that too,” says Hepsworth.
Data Management Insight: What was the rationale behind this merger?
Ian Manocha: Mark and I have known each other and for quite a few years and have always seen the strategic value of working together.
Mark Hepsworth: We’re complementary businesses. We at Alveo focus on enterprise data management, market data, reference data and ESG data and Gresham has built a business around reconciliation, investment management data and connectivity services through to regulatory reporting. The common thread is that we’re both solving data management problems for customers in financial services.
DMI: Where do you see complementarity?
MH: There’s a lot of overlap in terms of some of our customers but also the type of customers that we both sell to, the parts of those customers that we sell to both on the sell side and the buy side, and in areas like exchanges. Also, often at a senior level the same person is responsible for what their firm is doing around market data, as well as reconciliations data for example, and data management..
DMI: What triggered the eventual decision to merge?
IM: A number of things really came together at the right time. There was STG’s interest in us and the board’s view that our shareholders would be open to an exit at the right price. And from a Gresham perspective, we had a sense that, at this stage of the company’s development, we were going to be better served coming off the public markets and having the backing of a large firm like STG to accelerate our journey to take on the opportunities that we were seeing in the market. Mark and I started having the ‘we are finally going to make this happen’, conversation.
DMI: What are those opportunities?
IM: Between us we’ve got the landscape well covered so the question is now, having got all that data and now having the capability to manage it and ensure the quality of it, and of course, the reconciliation capabilities, a part of that question is, ‘what more can we do with it – how can we convert that into a business opportunity for our clients’? That’s the exciting area. So we see an opportunity now to invest more in areas like AI and to invest more in other players in the market.
DMI: What are your plans for growth?
IM: Gresham built a business organically and with some M&A work – we’ve acquired four firms in my nine years at the company. But that’s become more difficult for us on the public markets. It’s well known that there are challenges around liquidity particularly for small caps. We now have the financial backing of STG to look at those opportunities, whether we go after other firms or through organic investment, to fill out that vision of being the leading player in the data automation space for capital markets.
DMI: What will the new company offer its customers?
MH: What we’re really looking to do is create a significant new player in data management for financial services. We now have a broader range of capabilities and data management solutions that stretches further across the enterprise than they did before so we can solve more problems for clients.
Clients have a real focus on data both operationally and in terms of efficiently processing that data and delivering to business users, and doing that with the right level of governance control and transparency. All our customers are regulated and ensuring that they’re using high-quality data in their downstream processes is very important.
IM: Our customers are looking for a real heavyweight player in the data automation and data management space. They want a single heavyweight, well-funded, global company with strong technology capabilities and deep domain expertise to be their partner in their digital transformation because they’re fed up working with people that don’t understand the detail of capital markets data, and they’re fed up with having too many parties to work with.
DMI: What factors are driving the demand you want to meet?
MH: What I’ve seen over the years is that clients effectively feel data management could be easier than it is, that there’s more manual process than then they’d like. Both our companies have really focused their roadmaps in recent years around how we make that easier for customers. We moved to the cloud and both adopted open-source technologies that facilitates easy data management, as well as focused on improving business user self service. We really want to make data management easier for customers and that’s really where we’re going with the automation piece in our new tag line
IM: I’ve long felt that customers are looking to simplify their operating models. It’s not just about having the technical software, it’s also the skills and the capacity to deliver the change that’s needed. That’s particularly true in the mid-sized and smaller firms. There’s no way they can possibly build all that capability in house so we want to be the partner that they seek to deliver that end to-end-capability as a service.
DMI: Are there any practical technical issues you have had to overcome in your integration?
IM: Both firms have got modern development shops, cloud-native tech stacks and we use modern tools, so the kind of legacy stuff that’s harder to move forward is not an issue for us. And at the product level, things like APIs and cloud solutions, you don’t necessarily need to have the deep level of integration you did in the past. So for customers that won’t be visible.
DMI: What products and services will you be offering initially and what do you have in the pipeline?
MH: We will continue to offer those solutions we’re famous for: data automation and control, reconciliations and exceptions management, market data EDM, investment management data aggregation and regulatory reporting. But we’re also excited to get going on new initiatives.
IM: First out of the gates will be offerings for investment managers leveraging the greater richness of data that we now manage on their behalf. Let me give you a practical example, in Alveo market data pricing projects we are readily able to source pricing data for liquid assets but often struggle to obtain pricing for illiquid assets. Whereas in many Gresham NAV reconciliation projects were are pulling latest available pricing for some illiquid assets. So together we can fill a price visibility gap for our customers.
There are many other examples where we can now inject valuable insights into core processes without firms having to invest in costly, risky, data lake projects. And thinking more strategically, leveraging the Alveo data management technology will help business users with self-service and distribution of these combined data sets. It’s super exciting for us and the customers we’ve spoken to are also enthusiastic which it the acid test.
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